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Effects of Online Shopping on Clothing Industry

2316 words (9 pages) Essay in Marketing

14/06/17 Marketing Reference this

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Introduction

Internet has emerged as the most appealing way for shopping after the first online shopping store was initiated in 1990s (Geissler, 2001). The fastest and convenient online shopping with the rapidly growing power of computing has empowered the customers in different ways (Jones & Jones, 2006). Similarly, the effects of online shopping adventures have increased the opportunities for clothing industry to use new modern tool to increase the sale and make the most of the technology; with the growing online shopping of clothing, rapid changes has been observed in the industry (Rosen, Jaffe & Perez-Lopez, 1997). These changes are involved increased demand and sale of clothing. In addition, different factors and trends of online shopping are serving as the main cause of these changes (Geissler, 2001). These trends and factors are affecting the traditional tools of marketing and advertising in the industry; moreover, online shopping has provided the customers with enhanced opportunity to shop their most preferred clothes and this trend has increased the competitive advantage in the industry (Jones & Jones, 2006). Due to number of advantages of arisen technology, clothing industry has observed many changes; different trends of selling and advertising are possible because of online facility of selling product.

This paper aims to identify the clothing trends, online sales and distribution channels of industry. Moreover, find the impact of e-commerce on the competitive background of Clothing industry and Business-to-Business E-Commerce Models adopted by important players of industry.

Research Question

Research question for this paper is:

“How Online Shopping is affecting the Clothing Industry”.

Research Objectives

Objectives of Study are:

To identify the Clothing Distribution Channels, Industry Trends and Online Sales

To identify the Business-to-Business E-Commerce Models in the Clothing-Retail Channel

To identify Impact of E-Commerce on Competitive Background of the Clothing Industry

Critical Literature Review

In contemporary time, shopping through the Internet has turned out to be one of the most rapidly growing ways of buying, with increasing sales growth rates outpacing the traditional clothing retail settings (Geissler, 2001). A report of the Direct Marketing Association (1990-1992) explored that clothing is the most purchased products in the world between 1988 and 1991. The sales of clothing two times increased between 1982 and 1987 (Jones & Jones, 2006). As a result of growing use of internet and its contribution in commerce and shopping, large number of sales in all kinds of products observed during last decade. Online shopping and e-commerce has provided more opportunities for traders and businesses to spread their business across the world (Rosen, Jaffe & Perez-Lopez, 1997).

There is an increased rate of online clothing shopping around the world. The increased in the demand and sale has created new trends in the industry (Jones & Jones, 2006). A survey report revealed that clothing is one of the three key products that internet users prefer to purchase online and these online clothing shoppers are mostly teenagers (Rosen, Jaffe & Perez-Lopez, 1997). The rate of online clothing shopping makes clothing the third most popular category for Internet sales. The reasons explained by different researchers is that fastest growing world has changed the life style and now people like to save their time as the most priority. In addition, the growth of e-tailing offers certain advantages of shopping on the Internet, with a few clicks of the mouse and keys, consumers can save maximum time and effort due to services offered by the companies on the web (Geissler, 2001).

Online shopping has not only affected the consumers’ perception and their shopping attitude but influenced the industries and business sectors (Jones & Jones, 2006). However, clothing industry being one of the most purchased shopping items on internet, apparently getting magnificent benefits including changes in its number of approaches. It is obvious that online shopping is helpful to industries and clothing industry in cutting the cost of real estates and maintaining low inventories. Clothing retailers now find it easier to approach the potential customers on internet and retail industry now seem to adopt number of shopping method built by online marketers to maintain a customer base through which maximum number of customers can be attracted (Geissler, 2001).

The effects of online shopping on clothing industry has persuaded different researchers to identify how clothing and apparel industry is using the distribution channel; what are the industry trends and how they are able to increase online sale (Rosen, Jaffe & Perez-Lopez, 1997) . There are different that aim to assess and evaluate the effects of online shopping on the competitive Background of the Clothing Industry and how this industry is able to do Business-to-Business E-Commerce by adopting Models in the clothing Retail Channel (Jones & Jones, 2006).

Clothing Distribution Channels, Clothing Industry Trends and Online Sales

The Distribution Channel is such a system of interdependent organizations that work collectively to form value as products proceed through the channel. In other words, it is a chain of mediators; each passing the product down the chain to the next organization, until it finally reaches the user (Jones & Jones, 2006). The process of passing products from manufacturer to user is known as the ‘Distribution Channel.’ Each of the factors in these channels has their own certain requirement, which the producer have to take into consideration, with all important products user (Geissler, 2001).

Just like other retail industry, clothing industry has created a greater number of retail channels, internet shopping websites, shopping catalogs, and online retail stores. Thus clothing Companies’ are creating maximum opportunities for their customers to find them and purchase the companies’ products based on the types of different clothing retail channels companies have, changing the consumers’ shopping behavior (Loshin & Vacca, 2004). However, Clothing e-tailing has possessed its own set of challenges and complicated process of the purchase of clothing products is difficult if companies are not successful to reach their customers in an effective way (Khosrowpour, 2005).

Consumers show reluctance for online shopping if they do not find reason to buy a product or if the delivery charges are high and returning items are difficult. When it comes to online Shopping, every type of e-marketing is regarded as significant to clothing firms as a direct marketing channels including online clothing catalogs and Internet websites; through these direct marketing tools companies can attract the customers because customers get opportunity to compare both products (Jones & Jones, 2006) . An attractive and effective website along with photos, textual description, product demonstration and customer services creates such a platform for company through which information travels very fast and customers get attracted towards the product automatically (Geissler, 2001).

Only in U.S., online clothing industry in growing very fast and firms are considering over increasing the number of online shopping web sites because web site provides a platform for the firms to spread their marketing message and increase the sale (Jones & Jones, 2006). A web site is successful if it is visited by consumers and conversion of visitors into buyers makes a web site effective (Thanasankit, 2003). The effectiveness of a web site refers to receiving positive attitude of customers towards company, product and site. However, an attitude of a consumer toward an object can be assessed by the person’s positive or negative assessment of that object. The positive attitude of customers toward clothing websites can be drawn from their favorable or unfavorable assessment of those websites; as a consequence, an effective clothing website can bring out positive attitude of consumers toward that website (Geissler, 2001).

Business-to-Business E-Commerce Models in the Clothing-Retail Channel

The possible benefits from successful and effective web-base business-to-business models in the clothing industries are remarkable (Jones & Jones, 2006). As a result of increasing product proliferation and shorter life cycles of product, clothing industry acquire essential extra costs in the shape of inventory carrying costs, stock-out costs, and markdown costs (Geissler, 2001).

Online B2Bs Model Impact on Performance

Business-to-business models are anticipated to increase and improve the performance of supply channels that are considered critical to meet online clothing requirements of retailers. Increase in B2B exchange provides the companies with more collaborative product design, inventory planning, and value add services (Bidgoli, 2002).

There are some of the positive effects of B2Bs in the online clothing retail channel, as follows:

Lessening the Cost of Communication Channel

Electronic Data Interchange, known as EDI, has been extensively used to enhance the speed, accuracy, and cost of transferring data between channels. B2B models largely depend on web-based data exchange, which offers a number of advantages to firms, such as

a) Using hub system not pair-wise connections with a centralized means of exchange which needs only one extra link to be included when a new firm is added to the network, but not includes single link between the new firm and the built firms in the network (Corbitt & Qirim, 2004).

b) Using an improved centralized, keeping software and protocols, make a process of one centralized location and not requiring each link in the network to be advanced. This is an important advantage, because maintenance and advancement costs are substantial for EDI systems.

Other advantages of B2Bs in Clothing industry are as follows:

1) Using centralized systems can improve standardization, decreasing the costs by lessening proprietary standards and requirements.

2) Enhancing the prominence in the supply chain, thus enhancing order implementation, inventory management and customer service (Korper & Ellis, 2001).

3) Upgrading the Forecasting Efficiency

Upgradation of forecasting efficiency is one of the greatest benefits of B2Bs in the clothing industry. By adopting online B2Bs models companies can enhance their forecasting efficiency and in turn allow the firms to match demand and supply. Online shopping trends have affected the business models trends in the clothing industry. With growing changes in the industry and having different predictable demands and incurring cost of stock-out, mark-outs and inventory carry cost (Jones & Jones, 2006).

Channel Visibility and Prominence

Channel visibility in concert with good collaboration between channel partners provides a much streamlined supply chain.

Decreasing Channel Inventories

The high cost of carrying inventory in clothing industry can form a decreased inventory.

Enhancing Design

With the improve technology the representation of product and other online factors and designers are now more familiar with virtual collaboration, and efficiency to design new products fast can be enhanced. Moreover, approach to a world aide supply network can improve the ability of clothing firms to find the right fabric and its elements.

Impact of E-Commerce on Competitive Background of the Clothing Industry

There has been an impact of B2B business that simply extends the current trends such as shorter lead times, more dependable lead times as well as more orders (Singleton, 1997). The advent of internet technology has provided the opportunity for the restructuring of few parts of the clothing retail channel (Geissler, 2001).

Functions that are related to information is now performed by agents and other mediators, they can be transferred to the web, even though the difficulty of signifying the characteristics of clothes and other clothing products make the web site an appropriate alternative (Jones & Jones, 2006) .

Anticipated Evolution of B2Bs in the Clothing Industry

The clothing industry has different features that enable it a principle candidate for B2Bs rapid adoption:

Demand is unpredictably high: The unpredictability of demand is higher and there is need of improved and enhanced information channel.

• The high disintegration of plants and global dispersal of plants create the requirement for high transparency: many local players are benefited due to little market information.

In other words, there is a lot of lacking and room for more improvement in the industry. There are other factors that are slowing the rate of adoption such as products, capabilities of products, quality of products and elements are difficult to signify.

Clothing plants are small, with relatively low levels of difficulty and implementation will be challenging. The complication of communication among channel is relatively high.

Communication about product design, product quality, and plant productivity has specific partisanship. This type of communication is rather difficult to put on line and mediators provide domain proficiency and local information that is hard to mechanize.

Online Clothing Distribution Channel Process

Conclusion

Technological progress has added to the development of online shopping by providing easier ways for consumers to secure goods through the Internet (Jones & Jones, 2006) . The activity that began as a dribble among audacious shoppers and internet intransigents has turned out to be an inundation of typical market activity especially in the last few years. The expansion in return of online product and service distribution is growing and will for the predictable prospect. The business people who are aware of where they have to be in five years, have already laid their online distribution channels plans as per to the trends that are seeing today. Regardless of the fact that present economic challenges facing consumers and reducing consumer trust and online shopping for clothing carries on to remain for the most of online consumers (Geissler, 2001).

This new trends have motivated the clothing industry to accept and react to the changes by adopting online marketing and business models. Moreover, different men’s and women’s clothing channels such as boots, handbags, dresses, sandals, coats, jackets and athletic shoes, jackets and casual shoes are most shopped on internet but these items are needed to try by putting on and there is chance that this factor reduces the effectiveness of online shopping . Therefore, clothing industry is now more focusing to deal with the number of marketing and business model that are the most affected in the industry to modernize according to the demand.

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